Elexon has blocked Omni Energy from registering new meters, taking on new customers.
The move is subject to approval from Ofgem.
This is because Omni Energy is in default of the Balancing and Settlement Code (BSC) which Elexon manages.
The BSC is a legal document that defines the rules and governance for the balancing mechanism and imbalance settlement processes of electricity in the UK.
Elexon found that the company failed to sufficiently reduce its credit cover percentage.
A few weeks ago, the Leeds-based firm reportedly sent an email to 10,000 customers warning them that it is highly likely to close before the end of November.
A few days later, the company reportedly switched some of its customers to rival companies without their consent.
ELN has contacted Omni Energy for a response.